Output from the UK’s car factories totalled 1.7 million in 2016 – the most vehicles built for 17 years.
And emphasising the importance of achieving effective trade deals after Britain leaves the European Union, more than one in two cars that left the production lines were exported to Europe, the UK’s single largest trading partner.
According to new figures from the Society of Motor Manufacturers & Traders (SMMT), the 15 brands with manufacturing plants in the UK produced a total of 1,722,698 cars in 2016 – 8.5 per cent up on the 2015 total and the highest output since 1999.
Of these more than 1.35 million vehicles were exported across the world, more than in any time previously. Global demand for British-built cars rose by 10.3 per cent to set a second consecutive annual record. Around eight out of every 10 cars manufactured in the UK is now exported to one of 160 markets worldwide.
The recovering European market accounted for the bulk of the growth – exports to the rest of the EU grew 7.5 per cent to 758,680 and accounted for more than half of all UK car exports.
Growth was strong across several markets. In the US – the UK’s biggest export destination after the EU – demand rose by 47.2 per cent, accounting for around 14.5 per cent of all UK car exports. Turkey, Japan and Canada all saw strong growth. China, in recent times a major expanding market and now the third biggest for UK product, grew by a more modest 3.1 per cent with 88,610 vehicles exported last year.
Domestic demand, meanwhile, was up 2.4 per cent in the year, and the UK remains the second largest car market in Europe, again after Germany. One in seven new cars registered by UK buyers is now made in Britain, up from one in eight three years ago.
The SMMT argues that the strong manufacturing performance is due to the investments made over recent years in world-class production facilities, cutting-edge design and technology and one of Europe’s most highly skilled and productive workforces.
Of the ten brand-new car models that began production in the UK last year, nine were premium sector cars – the UK the second largest producer of premium cars after Germany and the third biggest car producer as a whole in Europe.
The UK’s largest car plant, Nissan in Sunderland, celebrated its 30th anniversary in 2016 with output of 507,430 vehicles, the second highest total in the plant’s history.
During 2016 investments totaling around £1.66 billion were announced in UK car manufacturing, across several companies. However this figure is down from the £2.5 billion announced in 2015.
As well as providing by far the UK’s largest export market, Europe also supplies the majority of components within UK-built vehicles. In a clear message to politicians negotiating post-Brexit trade agreements with Europe, the SMMT emphasises the critical importance of tariff and barrier-free trade to future UK automotive production.
“The tremendous growth in UK production is testament to the global competitiveness of the UK automotive sector, says SMMT chief executive, Mike Hawes.
“High class engineering, advanced technology and a workforce committed to quality have helped turn around the industry, making the UK among the most productive places in Europe to make cars.”
Hawes adds that the growth has been driven by significant investment in new plants and products over the past few years, not a post-Brexit bounce.
“We want trade deals but they must be the right deals, not rushed deals – failure to do so could damage UK automotive manufacturing beyond repair,” he says.